Debt-strapped Lanco Infratech Ltd on Wednesday announced that it has sold its 1,200 MW Udupi power plant to Adani Power Ltd, the power business arm of the Adani Group.

The deal, according to Lanco, is valued at more than Rs 6,000 crore.

The high-value deal comes less than three weeks after Reliance Power agreed to acquire three hydel projects of the Delhi-based Jaypee Group. Adani Power was also reported to be in the race for those hydro plants.

For Lanco Infratech, this transaction will help the company in reducing its debt and will enable it to receive about Rs 2,000 crore as cash and additionally, Adani Power will take Udupi Power’s long-time debt of around Rs 4,000 crore.

Lanco, in July last year, had started a process to restructure its $1.3 billion debt on its books. It had a net debt of about Rs 36,000 crore at the end of March this year, according to the company website. The coal-based power plant in Udupi has two units of 600 MW each and imports about 4 million tonnes of coal per year from Indonesia.

According to Lanco Infratech, the Udupi plant is the “first independent power project in the country based on 100 per cent imported coal with a captive jetty of four million tonnes per annum and an external coal handling system in the new Mangalore Port Trust.”

The capacity can be, if required, expanded to handle another four million tonne capacity, it added.

Lanco Infratech already has signed a pact with the Karnataka government for expanding the plant’s generation capacity to 1,320 MW. The Udupi project supplies 90 per cent of the power generated to Karnataka and 10 per cent to Punjab.

Currently, Adani Power has an installed generation capacity of about 8,580 MW, with the proposed acquisition help in expanding its portfolio. On July 27, Reliance Power had announced it would acquire three hydel plants of Jaypee group.